(Ecofin Agency) – The Malawi, whose economy is largely dependent on agriculture, faces several shocks. The authorities, supported by their international partners, have implemented reforms for economic recovery.
The government of Malawi will benefit from funding of 35 million US dollars, in order to boost the economic recovery of the country. The announcement was made on Saturday July 2 by the United States Agency for International Development (USAID), via a Press release published on its website.
This funding is part of a five-year project. It aims to empower women and youth, expand agricultural commercialization, increase household and community resilience, and address the impacts of climate change.
According to the briefing note, the initiative will create jobs, generate income for smallholder farmers and increase the country’s agricultural and food exports. The long-term objective is to make the private sector a sector ” more inclusive, gender equitable, diverse and resilient that promotes sustainable wealth creation by including Malawi’s diverse and under-resourced communities ».
« The initiative will strengthen rural economic hubs around value chains or enterprises that serve as anchors for an ecosystem of actors, from smallholder farmers to service providers and value-added processing », Specifies the information note.
The program comes at a time when Malawi’s economy is under several pressures, according to World Bank data. The country’s budget deficit has reached its highest level in more than a decade. The Bank says several years of increased commercial borrowing have made the country’s debt “ unsustainable ».
In addition, the Bretton Woods institution believes that ” Malawi’s economic growth is expected to continue to decline, due to these chronic imbalances which have been exacerbated by severe weather events. The war between Ukraine and Russia added another crisis to what was already a difficult economic climate, with rising prices for fuel, fertilizers and other raw materials impacting foreign exchange reserves and exerting a pressure on inflation ».
The authorities have initiated key policy reforms to address macroeconomic imbalances and ensure a recovery, however, the Bank recommends additional measures in at least three areas. It is about putting in place a coordinated package of reforms to restore macroeconomic stability, strengthen export competitiveness and market-driven growth, and protect the poor and build resilience.
Jean-Marc Gogbeu